BRITISH HOMEOWNERS COULD SAVE AN AVERAGE OF OVER £2000* IN 2021 BY REMORTGAGING

• Homeowning Brits could reduce household outgoings by an average of £169* per month by remortgaging at current rates.
• 84% of homeowners say their mortgage is their biggest monthly outgoing, yet 29% aren’t aware of how much they pay in interest each month.
• Despite 70% saying they want to get a better handle on their money in 2021, just 1 in 10 (11%) have considered remortgaging as a way to improve finances.

British homeowners could save an average of over £2000* this year by remortgaging to a fixed-rate product at today’s rates, according to new research from TSB – the equivalent of £169* per month. Yet the majority (89%) haven’t considered this as an option.

The research found that for 84% of homeowners, their mortgage is their biggest monthly outgoing, yet 29% aren’t aware of how much they pay in interest each month.

Some homeowners are put off remortgaging, with more than half (51%) saying they are happy with their current rate. 16% think there are ‘unnecessary fees involved’ with remortgaging, 15% think they cannot remortgage because of early repayment charges. A quarter (25%) of homeowners say they would find the task too stressful or daunting (12%). TSB today busts some of the myths that stop homeowners seeking a better deal.

As households across the UK continue to experience financial uncertainty as a result of the pandemic, this January almost three quarters (70%) of homeowners say they are looking for ways they can reduce spending in order to get their finances into shape for the coming year. However, TSB’s research identified that when cutting down on spending respondents will look at cutting down on takeaways (60%), changing energy provider (33%), and stopping takeaway coffee (29%) – yet just 1 in 10 (11%) say they have thought about remortgaging their home.

However, according to TSB, with a potential saving of £169 per month, Brits are underestimating how much they could save – the equivalent to 61 coffees or four months of gym membership.

Nick Smith, Head of Mortgages, TSB comments:

“Your mortgage is typically the biggest investment you will ever make, yet it’s not always the first place where homeowners will look when reviewing their finances. Remortgaging might not be right for everyone, but it’s important to take a look at your options, know the amount of interest you’re paying and speaking to your bank or mortgage adviser about any changes that could save you money.”

TSB BUSTS THE MYTHS ABOUT REMORTGAGING

• Myth 1: It’s daunting or too stressful

  A quarter (25%) of homeowners say they are put off remortgaging as they ‘find the task daunting’ or ‘stressful’. Remortgaging can be scary, however, by speaking to your bank or a mortgage adviser, you can make the process as easy and seamless as possible. TSB has mortgage advisers who can walk customers through potential options and are happy to answer any questions.

• Myth 2: Happy with their current rate

  More than half (51%) of homeowners said that they aren’t considering remortgaging because they are ‘happy with their current rate’. However, our research shows with a potential £2000 annual saving, it is always worth shopping around to check you have the best deal.

• Myth 3: Unnecessary fees

  16% of homeowners are ‘concerned about unnecessary fees’. However, you won’t necessarily have to pay a fee as this will depend on the mortgage you choose. Speak to your mortgage adviser or broker who will be able to explain what, if any, fees will apply.

• Myth 4: Locked in

  15% say they think they can’t remortgage now because of Early Repayment Charges (ERCs) – but with very low interest rates it may still be worth considering paying an ERC. A mortgage broker could advise whether it makes sense to pay to leave your current deal early to lock into a new low rate.

• Myth 5: Takes too long and not sure where to look for a new deal

  Most importantly, don’t suffer in silence. Talk to your bank. If you’re not sure where to start and need a hand with managing debt, your bank can help provide the right solutions for your needs14% of Brits say that remortgaging takes too long and they wouldn’t know where to look for a new deal. Navigating through different mortgage deals can feel overwhelming but there are many sources available to help. Look online for the mortgages and speak to a mortgage adviser or broker to help find the best deal for you. TSB mortgage advisers will spend an hour with customers on average – a small amount of time if this could save thousands of pounds.